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Mininiz and Reclamation Permit and Bondinp, <br />A Mining and Reclamation Permit issued by Colorado Division of Reclamation, Mining <br />and Safety will be required to operate the mine. The permit covers environmental and <br />operational aspects of the operation and includes bonding requirements to guarantee that <br />reclamation will be accomplished in accordance with the approved plan. The current <br />bond for the New Horizon Mine, Permit # C 1981008, is approximately $5,000,000. This <br />operation will be permitted as a separate operation with a completely separate bond. The <br />new bond has not been determined yet but may be in the range of $2-3,000,000. The <br />bonding requirement may vary due to permit modifications, mining progress, or <br />reclamation progress. Typically for reclamation progress, 60% bond release is available <br />upon completion of grading and seeding, another 25% when vegetation is adequate to <br />control erosion, and the final 15% after detailed vegetation studies prove that cover, <br />productivity and species diversity have met permit requirements. Final release of the <br />bond is typically 9-10 years after initial grading and seeding. <br />2.2 Mining Impacts <br />Mine Access and Coal Haul Routes <br />Access to the site will require access permits from the County. Current plans call for an <br />access to the operations and mining area along AA Road and two accesses to the mining <br />area from 2600 Road. The proposed location of these access points are shown on Sheet 2 <br />of 6, Exhibit A. Permitting for these access points will be part of a more comprehensive <br />AML <br />agreement with the Montrose County Road and Bridge Department which will include <br />the haul route used for transport of coal to the power plant. The transportation of <br />personnel, equipment and supplies to the site will have minimal impact to the County <br />roads compared to the haul truck traffic. Mining at this new site will increase the haul <br />distance from existing 6.5 miles to 8-9 miles. The haul route is shown on Sheet 2 of 6, <br />Exhibit A. Coal production is projected to be 400,000 to 450,000 tons per year. The <br />projected peak delivery to the power plant will be 2,500 tons per day. The coal has <br />typically been hauled in 25 ton truck loads but recently 35 ton trucks have been permitted <br />by the County. As trucks are replaced, the larger capacity trucks will be used. By using <br />the higher capacity truck, the number of trucks required for the peak day haul could be <br />reduced from 100 trucks/ day to 72 trucks/day. Geotechnical and structural evaluation of <br />the existing roads is under way to determine the impact of this traffic on the additional <br />sections of the County roads. Design upgrades may include asphalt overlays, complete <br />road section reconstruction, upgrade of an existing bridge over Tuttle Draw, and/or <br />realignment of sections of the road for better site and speed characteristics. <br />Blasting Plan <br />The overburden material over the coal seam and the inter burden between coal seams <br />must be fragmented to a size that can be easily handled and efficiently moved by the <br />Aft mining equipment. To accomplish this, blasting must be done. The DRMS permit <br />includes very detailed procedures for how blasting will be done in compliance with all <br />applicable State and Federal laws. Very specific regulations apply to airblast, ground <br />vibration and fly-rock. <br />Page 9